Hello everyone!!!!
Due to fantastic marketing strategies, digital bombarding and web series hypes many of us are get inspired to do some bang on investment and trading in financial markets. But get stuck up with all terms and language used by experts and professionals for different kinds market. To clear this confusion let's start with different kinds of financial markets which we can now enter into.
Equity Market -:
Equity markets /stock market/share market is popular market around the globe. In India, National Stock Exchange (NSE) and Bombay Stock Exchange(BSE) are two markets where most of equity trading done with huge involvement of layman. Benchmarks [Index] of NSE and BSE are called Nifty and Sensex respectively. Company stocks included in both indices are considered safe for trading and long term holding for wealth creation.
Derivative Market -:
Derivative market is relatively risky market. Movement of this market depends upon equity market. Futures,options and swaps are instruments traded in derivative market.Deals done here are in lots and requires margins in lakhs before entering into trade. Trading in derivative market follows high risk high reward principle.
Bond Market-:
Bonds also knows as debentures are considered safe financial instrument. Buying bonds from company or government with fix interest for certain time period is good investment for tax saving. Bonds are also traded in exchanges like company stocks.
Commodity Market-:
Day to day commodities like oil, sugar ,cotton, metals are traded in this market. In this market primary trades natural commodities and not manufactured products. They are traded in global level. Demand and supply chain of commodity decides price. Factors like weather, crops, mining policies for metals, natural calamities, import- export policies plays important role in commodity market.Future contracts and swaps instruments are used for trading purpose in this markets.
Currency Market -:
Currency market is place where one can buy and sell any currency across the globe.E.g one can have swap instrument for United States Dollar (USD)to euro. Principle function of currency market is to set the prices of some currency with respect to another currency and favour exchange of funds between different countries.
5.Cryptocurrency -:
This is popular market now a days and everyone rushing to buy cryptocurrency like a hot cake. These are decentralized currency build with the help of BLOCKCHAIN technology. Cryptocurrencies like Bitcoin and Ethurium are now considered as option to US dollars. Many are using cryptocurrencies for hiding black money is new headache for countries. Access to cryptocurrencies worldwide without any check of authorized financial institutions is making easy money mobilization which is somehow becoming helpful for terrorist organizations.
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